Comment: The German Treasury yield curve should continue to flatten, probably quite quickly, as it moves towards a more Japanese-style shape. Therefore we feel that ten-year Bunds will yield less than their US counterparts, say about 40 or 50 basis points less. Three-month Bubills yield 0.60% while Libor is 1.64%, 100 basis points over official rates probably now considered the minimum banks have to pay. Note how steadily this futures contract’s rally has clung to trendline support and how the
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